The emergence of subscription-based payment methods has transformed the way consumers access products and services, creating a pressing need for suitable online payment solutions.
This article explores the various types of subscription-based business model and the solutions offered by our SlimPay platform, which specialises in account-to-account payments in France and Europe.
Whatever your sector of activity, if your business model is subscription-based, discover the key factors that contribute to selection of the best payment solution, promoting a transparent and secure experience for your subscribers.
What is the subscription-based business model?
The subscription-based business model is based on the ongoing supply of products or services against regular payments from customers.
Instead of a one-off payment for a product or service, customers agree to pay periodically, often monthly or annually, to continue to benefit from the product or service.
This business model is based on several key factors.
→ First of all, it involves recurring payments, whereby consumers subscribe to a service or product and agree to be debited on a regular basis.
This approach creates a stable and predictable source of income for the merchant.
In addition, the model promotes the development of long-term relationships between merchant and customer, encouraging the merchant to maintain a high quality product or service in order to retain subscribers.
→ Flexibility is also an important factor.
Subscription models often offer a variety of options in terms of duration of the subscription, the features included, and even the possibility of pausing or cancelling the subscription.
→ In terms of revenue, scalability of this model is more predictable and stable than for other business models, enabling companies to forecast income based on the number of subscribers and the subscription rates.
In addition, companies can differentiate their offer by providing a variety of subscription packages with different levels of service, thus giving customers the opportunity to choose the online payment solution that best meets their needs.
→ Lastly, subscription models often help to lower the entry barrier for customers, who can benefit immediately from the product or service without having to pay out a large lump sum.
The subscription-based business model is becoming increasingly popular in a variety of sectors, including streaming, music, health, online services, and even in areas such as meal delivery and the sale of beauty products.
It is often in tune with the preferences of contemporary consumers, who are looking for convenience, personalisation and continuous access to quality products and services.
Types of subscription-based payment models
There are two main subscription models: fixed-rate subscriptions and pay-as-you-go subscriptions:
- With a fixed-rate subscription, consumers opt for a payment structure where a predefined amount is paid regularly for continuous access to a specific service. This model offers financial predictability for both the user and the provider, thus creating stability in the income generated by the subscription.
- In contrast, pay-as-you-go subscriptions take a more flexible approach, aligned with the actual consumption of services. In this scenario, the amount paid by the subscriber fluctuates according to the actual use made of the service. The more use the user makes of the service, the higher the monthly bill. This variability is well adapted to individual user needs, but can make revenue forecasting more difficult for service providers.
Selecting the right subscription model in line with the company’s offer and the consumer’s expectations is of crucial importance.
These subscription models can be adapted according to the specific requirements of the industry, the sector and the types of payment services offered by the provider.
How does SlimPay handle subscription payments?
Optimising payment management for subscriptions is an essential pillar of a successful business strategy.
As such, it is essential to adopt a payment method that uses a payment platform dedicated to subscription management and specialising in recurring payments.
For merchants, using an online payment platform saves time while ensuring that it is managed efficiently – a necessity for both customer satisfaction and business growth.
Whichever subscription model the merchant chooses, SlimPay, as a Payment Service Provider, can take care of the acquisition and processing all financial transactions.
The platform guarantees an income stream by directly retrieving the IBAN of new subscribers from their bank, thus helping to prevent fraud.
Through use of open banking, SlimPay offers a fast payment method and guarantees the security of the transaction. With SlimCollect Recurring, the platform is perfectly suited to subscriptions:
- with an initial payment (when sending the equipment, streaming services, a deposit, etc.);
- without an initial payment (freemium business models, end-of-month billing, etc.).
SlimPay also provides its merchant customers with a clear, functional dashboard, enabling real-time control of all customer subscriptions from a single platform.
In the event of a failed transaction, the Automatic Retry feature simplifies recovery management. This feature automatically makes a further attempt to obtain payment and informs the customer of the steps taken.
Conclusion
Choosing SlimPay as an online payment solution for subscriptions is a strategic decision for merchants looking to optimise their financial management.
With its advanced features and complete ecosystem for recurring payment solutions, SlimPay stands out as the ideal partner to simplify and significantly enhance your subscribers’ experience and your experience as a merchant.
The flexibility, reliability and innovation built into the SlimPay platform provide merchants with much more than a payment solution: they offer them the key to sustainable growth and long-term customer satisfaction.
